Statehouse Scoop: Indiana has a child care problem — and a chance to fix it
Since the end of 2024, Indiana’s child care providers have faced tremendous pressures.
Demand for care remains high, yet providers are losing staff, watching revenue drop and closing classrooms or entire programs. This moment exposes just how fragile Indiana’s child care system is and the real consequences of underinvesting in the providers that make the system work.
Those pressures intensified in December 2024 with the reimplementation of the waitlist for Child Care and Development Fund vouchers, followed by cuts to provider reimbursement rates. Now, providers across the state report steep revenue losses that threaten their operations.
In Marion County, average weekly revenue has fallen nearly 30%, according to data from Early Learning Indiana. The story is similar in both rural (Putnam County has an average decline of 20%) and suburban (Hamilton County has an average decline of 30%) counties. These numbers explain why more than 200 providers statewide have already closed, and why many more may be forced to shut down in the year ahead.
If Indiana wants a child care system that is both stabile and sustainable, it must take a more creative and realistic approach to financing it.
Not all the investment must come from government, but government has been a historically reliable and important player. Public funding provides stability for providers and keeps care more affordable for low-income working families.
Employers also play a part in this investment. Reliable child care supports employee well-being and helps businesses compete in attracting and retaining talent.
This session, the General Assembly is moving two bipartisan bills that increase both government and employer investments in child care, as something of a down payment toward more substantial investments during the 2027 budget.
House Bill 1177 expands an existing employer child care expenditure tax credit, incentivizing more businesses to view child care as part of its employee benefits package. It also allows TIF dollars to support the creation of new child care seats, giving communities a powerful economic development tool.
Combined with the flexibility offered in Senate Bill 4 to tap into existing state dollars through the Financial Responsibility and Opportunity Growth (FROG) Fund — a pool of $300 million that could be used to support CCDF funding — the legislature is proposing significant reinvestment in child care.
This is a moment when a solution to a challenge is clear.
Indiana’s child care system needs urgent and sustained financial investment. These bipartisan proposals offer a lifeline to providers and the families who depend on them. Indiana should use this moment to build a stronger, more sustainable future for all Hoosier families.